The average American now has around $38,000 in personal debt, not counting home mortgages.

1 in 10 (13%) Americans say they will be in debt for the rest of their lives.[1]

Even after the horrible debt crisis of 2008, the cycle of borrowing to buy and then borrowing more has returned in full force for many. 

I want to motivate you in this article to free yourself of any debt you’re in with the urgency of someone whose hair is on fire by listing some of the major benefits of getting out of debt.

While on the topic of getting out of debt, I would be remiss not to mention, the company I started which is helping people across the United States get out interest-bearing loans by replacing them with income-based funding wherein no loan of money is involved. Instead, customers receive funding in return for a fixed percentage of their income for a fixed period of time.

BFF has many advantages including: payments designed to stay affordable, no more accumulating interest, greater financial resilience in times of hardship and gaining an agent in BFF that has a vested interest in seeing you succeed because the better you do, the better BFF does. So check us out at and apply, it’s free to apply and it won’t affect your credit score. If you qualify, you can receive funding which can be used for basically anything including paying off your interest-bearing loans.

The benefits of getting out of debt are many. Here are my top 5:


Allowing interest to accumulate on your debt is the financial equivalent to burning your own money.

You see, when you burn money, the result is less money and no product, service or experience to show for it.

Similarly, when you are getting charged interest, the result is less money and no product, service or experience to show for it.

Accordingly, getting charged interest is the financial equivalent to literally burning your own money.

When you’re being charged $50, $100, or $200 a month in interest, this is money that you’re working to earn but are being deprived from the ability to enjoy. 

Interest accumulating on your debt is robbing you of the ability to enjoy the money that you work hard to earn.

Getting out of debt, and stopping the accumulation of interest on it, allows you to use and enjoy all the money you’re working so hard to earn.


A lot of financial advisors, planners, and commentators like to say there is such a thing as good debt and bad debt.

They argue that if you’ve taken out a loan and the money you took out is generating more than what it is costing you then it is good debt.

This is not entirely accurate.

You cannot judge the quality of an investment by the return alone. You must factor in the risk level of the investment as well.

Put differently, you must look at the ratio of return vs. risk and compare it with alternatives in order to judge the quality of a particular investment.

The higher the return/risk ratio, the more attractive the investment.

This brings me to the point that many financial commentators don’t stress enough when talking about good debt and bad debt and that is: Paying off your debt is a zero-risk investment with guaranteed retun.

Your return from paying off your debt is whatever the interest rate on the loan is, guaranteed, forever.

Consider the following example:

Let’s say you owe $1,000 with a 5% annual interest rate.

Scenario 1: You pay off the $1,000 balance on your loan.

Scenario 2: You invest $1,000 in a zero-risk investment that pays you a guaranteed 5% annual return.

From a cash flow perspective, both scenarios are equivalent.

In both cases, you spent $1,000 to cover your interest payments forever.

In other words, when you pay off a debt with a 5% interest rate it is as if you made a zero-risk investment that is guaranteed to pay 5% forever.

Accordingly, if you say that taking out a 5% interest loan and generating 8% return from it is considered good debt, you’ve completely neglected the fact that the 8% return you are projected to earn has risks and isn’t guaranteed, whereas the 5% return from paying off your debt is a guaranteed return.

So just comparing the returns of 8% and 5% and making a conclusion based on which is higher is comparing apples and oranges. 

If you look at how the market normally rewards zero-risk investments, the closest thing to a zero-risk investment is a U.S. Treasury bill. The interest rate on a U.S. treasury bill is around 2%, basically inflation.

Therefore, when you are paying off debt that has an interest rate greater than 2% you are making a zero-risk investment that is paying you more than any other zero-risk investment available on the market.


Money is the dominant source of stress in the United States for 44% of the population, dramatically outpacing personal relationships (25%) and work (18%). 

More than half of Americans report feeling anxious or insecure about money “often” or “all the time”. [2]

The pleasure you get from buying a new item is fleeting but, if you bought this item with borrowed money, the stress of the debt you’ve incurred to buy that item stays with you 24 hours a day 7 days a week until you pay it off.

The anxiety of carrying debt has been well documented to have profound effects on a person’s health, their social life, their relationship with their spouse and generally their overall level of happiness.

So you owe it to yourself, your family and your friends to make getting out of debt a priority for you financially.


Studies have shown that constant preoccupation with upcoming bills can lower a person’s IQ level by 13 points or a full night’s sleep loss.

This is because bill-related concerns consume mental resources, leaving less mental capacity available for other tasks.[3]

It’s analogous to texting while driving. Your driving performance will suffer because your mind is busy with texting.

Similarly, your cognitive functions at work will likely suffer when your mind is preoccupied with upcoming bills because your mental bandwidth will be used up by something else.

Additionally, financial stress can cause sleep apnea, marital problems, and illness all of which will impede your ability to earn money.

So getting out of debt and living within your means will not only save you money, but it will also enhance your income-earning effectiveness.


If you’re a Muslim, you probably know that interest is prohibited in Islam.

The prophet peace be upon him cursed the collector of interest, the payer and whosoever writes its contract.

There are numerous other instances where dealing with interest on debt is prohibited in the strongest of terms in both the Quran and authenticated sayings of the prophet peace be upon him.

Ridding yourself of any interest in your finances will give you the mental comfort of knowing that you are not dealing with anything that is strictly prohibited in your religion.

Other than refinancing, there are often some legitimate reasons why one may need financing. I truly believe that in these cases avoiding interest-bearing loans and going with an alternative product such as BFF’s Income-based funding is the prudent way to go. 

I hope I’ve motivated you to think seriously about getting yourself out of debt as soon as possible and more importantly to take action about your loans. 


[1] Northwestern Mutual’s 2018 Planning & Progress Study

[2] Northwestern Mutual’s 2018 Planning & Progress Study